Royal Caribbean sees strong start to 2023 bookings as Q4 loss narrows

By Scott Kanowsky 

Investing.com -- Royal Caribbean Cruises Ltd (NYSE:RCL) has posted a narrower fourth-quarter loss that was better than expected, as strong passenger demand partly offset an uptick in fuel costs.

The world's second-largest cruise line operator reported an adjusted net loss for the three months to December 31 of $300 million, which translated to a decline of $1.12 per share. That was an improvement on a loss of $1.2 billion or $4.78 per share for the same timeframe in the prior year.

Bloomberg consensus estimates had predicted that the company would report a loss of $1.34 a share during the period.

The result helped the group's annual adjusted net loss shrink to $1.9B, from a drop of $4.8B in 2021.

Load factors were line with the company's guidance of 95% during the final quarter. Total revenues per passenger cruise day also climbed by 4.5% at constant currency versus pre-pandemic levels thanks to higher prices and strength in the sales of onboard services.

But gross cruise costs measured against capacity grew by 5.8% versus the fourth quarter of 2019, spurred on in part by a spike in fuel expenses. Meanwhile, total quarterly cruise operating costs came in at $1.78B, up from $1.14B in the last quarter of the prior year.

"The benefit from multiple actions we have taken during the last few years to improve margins continue to yield results, as we focus on executing our proven formula of moderate yield growth and strong cost controls," said chief financial officer Naftali Holtz in a statement.

Royal Caribbean added that it is "very encouraged" by recent demand, with momentum in booking volumes carrying over from 2022 into the beginning of its current fiscal year. Its so-called "Wave" season - a key booking period from January to March when vacationers are expected to begin planning their upcoming holidays - is on track to be "record-breaking" as well, the company said.

The adjusted loss per share for the first quarter was subsequently forecast to be in the range of 65 cents to 85 cents. Analysts have predicted a loss of 83 cents per share.

“This is a decent report/guide, although (as usual) the rhetoric sounds much more bullish than the numbers (which really fall into the “inline” bucket),” analysts at Vital Knowledge said in a note to clients.

Shares in Royal Caribbean jumped by more than 4% in pre-market U.S. trading on Tuesday.